With no prospects of profitability for Orb Electrical Steels in a competitive European steel industry, Tata Steel has proposed to close the site in Britain, necessitating a lay-off of nearly 380 employees. Wolverhampton Engineering Steels Service Centre also faces closure.
Mumbai: Stating that it is “unable to find a way forward” for Orb Electrical Steels, multinational steel-making company Tata Steel, in a regulatory filing, stated that it proposes to close the site. The decision by the company that cited "considerable challenges" in the European steel industry will reportedly cause a loss of up to 380 jobs.
Orb Electrical Steels had struggled to keep up with customer requirements to supply steels used in electricity transformers and has been incurring losses for several years, Tata Steels stated.
Wolverhampton Engineering Steels Service Centre in Britain also faces closure as the company has not been able to find a buyer. The closure, which also includes a sales office in Bolton, would affect up to 26 jobs.
The company reportedly also said that the conversion of the site to create steels for future electric vehicle production would cost in excess of 50 million pounds in a highly competitive market where it faces higher-volume competitors in Europe and across the globe.
An IANS report cited Henrik Adam, CEO of Tata Steel's European operations, who said "We have been able to secure the future for almost 400 colleagues in CPI and Surahammars Bruks. However, today's proposal will be sad news for colleagues at Orb in South Wales. This is necessary, enabling us to focus our resources…"
At a time when the European steel industry is facing considerable challenges, funding substantial losses of Orb Electrical Steels is not sustainable, he reportedly stated, adding that there was no probability of the business returning to profitability.
However, the company assured that it will take steps to alleviate the effect on employees impacted which also includes offering alternative employment opportunities at other Tata Steel sites where possible.
Britain and Germany, the two biggest economies in Europe are witnessing negative growth rate and are reportedly on the edge of a recession.
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Last Updated 3, Sep 2019, 11:06 AM